India Forex Advisors / Market Commentary /28_Jan_2011

By @ibtimes on

Dear Reader,

Global Markets:

The Dollar traded mixed against most of the majors but weak against the Euro after mixed US data with Core Durable Goods Orders m/m and Unemployment Claims coming out weaker, adding 51k to 454k last week, meanwhile Pending Home Sales m/m coming out better than expected. ECB's Bini-Smaghi hawkish comments saying the recent pickup in inflation could 'no longer be ignored' proved positive for EURO even though he made clear that his statement should not to be seen as an indicator for future policy decision. Standard &Poor's decision to downgrade Japan to AA- on concerns over the country's high fiscal deficits had lead some strength in safe haven status boosting the appeal of the dollar and the likes of the Swiss franc. The Sterling fell low as $1.5890 from $1.5929 after U.K. consumer confidence plunged the most in almost two decades this month. With no data from AUD today the currency is likely to meet sellers with focus to flood-related announcements from Swan.

Technical Highlights:

EUR/USD: The Euro extended its gains and is currently trading at 1.3712 levels after making a high of 1.3758, highest since Nov 22, 2010. Yesterday's ECB policymaker commented that if there is an expected rise in imported goods, than inflation cannot be ignored triggered Euro gains. Looking ahead today, M3 Money Supply y/y expected better at 2.1% as against 1.9% prior. Immediate support comes at 1.3680 (H4 20 Middle Bollinger) while resistance comes at 1.3750 levels (H4 20 Upper Bollinger). EURINR (62.61) exporters should cover partially at current levels and importers can cover on dips. EUR/INR is likely to trade in the range of 62.50- 62.80 today. Short term slight Bullish and Medium term Bearish

GBP/USD: The Pound is currently trading at 1.5898 levels with GfK Consumer Confidence came weak at -29 as compared to -21 previously. Immediate support comes near 1.5820 (21 Daily EMA) followed by 1.5790(20 Daily Middle Bollinger) while resistance at 1.5946 (100 Weekly EMA) followed by 1.6010 (H4 20 Upper Bollinger). GBPINR (72.58) Exporters should partially cover at current levels and importers can cover below 71 levels. GBPINR is likely to trade in the range of 72.50 - 72.80 levels today. Short term slight Bullish and Medium term Bearish

USD/JPY: USD/JPY is currently trading at 82.71 levels post yesterday's downgraded credit rating of sovereign debt by S&P. Retail Sales y/y declined to -2%vs. 1.2% previous, Unemployment Rate came better at 4.9% vs. 5.1% expected and Tokyo Core CPI y/y came at -0.2% vs. -0.4 previously. Immediate resistance is at 82.78 levels (55 Daily EMA) followed by 83.18(200 Daily EMA) while immediate support is at 82.58 (21 Daily EMA) followed by 81.95(Daily 20 Lower Billinger). Yen Exporters can cover Feb month's exposure around 81 levels and Yen Importers to cover their exposures near 84 levels. Medium Term: Maintain Bearishness for the pair.

AUD/USD: The Aussie is currently trading near 0.9891. Immediate support comes at 0.9830 levels (Daily 20 Lower Bollinger) followed by 0.9812 levels (200 Daily EMA) while immediate resistance is at 0.9922(55 Daily EMA) followed by 1.0025(Daily 20 Upper Bollinger). Exporters are suggested to book Feb month's exposure towards 1.0100 levels, and Importers can cover their exposure on dips. Medium term: Bullish.

Gold: Gold tumbled and is trading near 1315 levels as investors shifted from the safe heaven asset. Overall the yellow metal had traded with a low of $1307 and high of $1345. Support for gold is near 1307 levels (200 Daily EMA ) followed by 1288(Weekly 20 Lower Bollinger) and immediate resistance is at 1323 (Daily 20 Lower Bollinger) followed by 1353 (200 Daily EMA). As said earlier, Buying on dips is recommended. Medium term: Maintain bullishness.

DOLLAR INDEX: Dollar Index is currently trading at 77.79 levels. US initial jobless claims jump 51k to 454k last week while US pending home sales rise 2.0% in Dec. Looking ahead today, Advance GDP q/q forecasted better at 3.5% vs. 2.6% prior with Consumer Sentiment also expected better at 73.1. Immediate Support at 77.60 (H4 20 Lower Bollinger) and resistance is at 77.92levels (H4 21 Daily EMA) followed by 78.22(20 Upper Bollinger). Medium Term: Slight Bullish

DISCLAIMER
These views/ forecasts/ suggestions, though proffered with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice. Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsible for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.

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